How EAC policy plans to solve woes of retailers

The move seeks to prevent a repeat of the problems facing Nakumatt and Uchumi supermarkets.[File, Standard]

The East African Community might soon introduce regulations to govern the retail market in an effort to prevent a repeat of the problems facing two Kenyan supermarket chains.

Senior officials from Kenya and Tanzania agreed to push for the formulation of a regional policy and regulatory framework by the EAC Secretariat to address challenges facing the sector.

This was agreed during a meeting in Dar es Salaam to address issues affecting trade between the two countries.

Kenya was represented by Trade Principal Secretary Chris Kiptoo. He met his Tanzanian counterpart, Elisante Ole Gabriel.

Frosty relations

Relations between Kenya and Tanzania have been frosty, with the two pulling in different directions.

The problem of Kenya’s cash-strapped Nakumatt and Uchumi supermarkets, which at some point had operations in Tanzania, has been one of the contentious issues.

In a previous meeting held in Mombasa, Tanzania demanded payment of a Sh2.3 billion debt owed by Uchumi to the nation’s suppliers.

The meeting in Tanzania was called to discuss the waning relations between Nairobi and Dar es Salaam, but saw the issue of Uchumi and Nakumatt sneaked into the agenda.

Large debt

Uchumi shut its stores in Tanzania and Uganda in 2015 as it sought to stem losses. The NSE-listed retailer left a large debt owed to suppliers.

At the Mombasa meeting, Kenya rejected the demand by the Tanzanian delegation.

Dr Kiptoo said while the Government had a 14 per cent stake in Uchumi, it had no control over the supermarket.

“Uchumi is listed at the Nairobi Securities Exchange and regulated by the Capital Markets Authority,” he said.